Centuria in Prudential refinance scheme

22 May 2017

Publication: The AustralianAuthor: Ben WilmotDate: 22 May 2017

Centuria in Prudential refinance scheme

The tide of offshore lending into Australian commercial real estate is rising with John McBain-led Centuria Capital’s listed industrial fund striking a major refinancing deal with offshore financier Prudential Insurance Company of America and two local banks.

The listed trust, which owns a $1 billion industrial portfolio, has entered into agreements for three new facilities operating under a common-terms structure with a total limit of $450 million at an anticipated “all-in” rate of 4.2 per cent.

The new facilities were sourced from two domestic banks, Bankwest and Westpac, and US financier Prudential Insurance Company of America.

The listed fund said the deal improved the diversity of its funding and extended its debt tenor to 3.3 years with a weighted average all-in margin of 1.6 per cent.

“The refinancing demonstrates strong finance support for CIP’s quality portfolio from both onshore and offshore lenders and we are pleased this has resulted in the creation of new banking relationships with Westpac and PGIM,” trust manager Ross Lees said. “The rates achieved across the facilities are competitive and provide CIP with the appropriate support and flexibility to execute on its investment strategy.” Prudential Insurance, which operates as PGIM Real Estate Finance, has been increasingly active locally and around the world.

PGIM Real Estate Finance’s investments in commercial mortgage loans are managed by the real estate finance business of PGIM, which had about $US88.52bn in assets under management and administration at the end of June last year.

The group last year provided a 10-year, $165m loan to finance 20 Martin Place, a landmark tower in the heart of Sydney that was developed by Pembroke Real Estate and serves as Apple’s headquarters.

That was PGIM Real Estate Finance’s third loan in Australia since the beginning of 2015 and it has since been involved with other real estate investment trusts. PGIM’s commercial mortgage lending business president, David Durning, said at the time the deal built on the group’s plans to expand its business internationally.